Many people think that Bitcoin, the cryptocurrency giant, was in a decline for much of 2019, but the reality is the asset has nearly doubled in value last year.
That is great news for Bitcoin investors and the digital currency industry as whole. Better yet, Bitcoin could continue to rise in price. In essence, the sky is the limit for Bitcoin and other types of cryptocurrencies as we enter into a new decade.
But can Bitcoin actually hit $50,000 or even more in 2020?
The answer is a definitive YES!
This is based on the economic principle of supply and demand. Let’s examine the supply end of things first. Bitcoin will soon be experiencing a halving event. That means the amount of Bitcoin being generated by the network will literally be cut down by 50%.
Typically speaking, when half the amount of a commodity is available for sale on the open market, it causes a supply problem. When there is a lack of supply, the commodity instantly becomes more valuable as long as there is a demand for the product.
Four years ago, the last Bitcoin halving event caused the cryptocurrency to rise by an amazing 4,000%!
Bitcoin is not your standard commodity like corn or wheat. For example, the supply and demand are not based on the amount produced versus the amount required for consumption in the form of food and fuel.
The demand for Bitcoin increases based primarily on the value of the commodity itself. That means most investors purchase Bitcoin when the price is rising because they believe it will continue to increase.
The upcoming Bitcoin halving event is the perfect storm to significantly raise the price of the cryptocurrency. First and foremost, production will be cut in half, which means the supply of Bitcoin will also be cut in half.
The consumer demand for Bitcoin as an investment vehicle is clearly strong since the asset has nearly doubled from the beginning of 2019 to the end of the year. Throughout the history of trade, low supply combined with high demand equals an increase in the value of a commodity.
As of the writing of this article, one Bitcoin is worth $7,540 USD. Imagine if that increases by 4,000% as it did during the last Bitcoin halving event that occurred only four (4) years ago. That means one Bitcoin will be worth $301,600 USD. Is that realistic? Only time will tell.
However, it is completely realistic to think that the upcoming Bitcoin halving event will cause each Bitcoin to grow by 25% of that 4,000% increase. Let’s see what that will look like.
If the upcoming Bitcoin halving event causes the value to increase by only 1,000%, each Bitcoin will be worth $75,400 USD. Let’s take it a step further.
If the upcoming halving event causes Bitcoin to rise by only 750%, the value will increase to $56,550 USD.
As you can clearly see, it is completely reasonable to believe that Bitcoin will make and even break the $50,000 USD mark in 2020. If you are interested in owning Bitcoin, we highly suggest getting involved now while the prices are still moderately low. You certainly do not want to look back at the end of 2020 and have any major regrets.